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Bloomberg | Keeping On Trucking

02.09.16 | Chris Bryant, Bloomberg

There's no doubt the recent trend in North American truck orders has been worrying. Class 8 (heavy trucks) orders plunged 48 percent in January year-on-year, according to FTR Transportation Intelligence.

But it's important to remember 2014 was the strongest year for freight since the recession, according to Bloomberg Intelligence. Truck orders surged in the final months of 2014 to near peak levels, continuing into early 2015, so some kind of correction was inevitable.

There was a similar slump in 2012 but equity investors who interpreted that as a sell-signal will have regretted it. So it's a little soon to conclude the industry (and the U.S. economy) is headed towards a cliff.

Some buying restraint is understandable given the uncertain global economic outlook. Forecasts vary, but truckmakers typically expect the North American heavy-truck market will drop about 15 percent in 2016. Manufacturers have responded by cutting jobs and production to prevent a further build-up in inventories.

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